China Mobile Communications Corp confirms participation in Pakistan’s third-generation wireless spectrum auction

BEIJING: China Mobile Communications Corp, the parent company of the world’s biggest mobile operator by user numbers, has confirmed its participation in an auction of Pakistan’s third-generation wireless spectrum.

With Pakistan as an example, CMCC intends to expand its operations to a greater number of emerging markets, according to Wang Jianzhou, chairman of China Mobile, in an interview Wednesday with China Daily. “We are also seeking opportunities to become a minority shareholder in telecom carriers in Europe or North America markets. We would like to be strategic investors (in them), which will help us achieve synergies,” said Wang. At end June, CMCC had 369.7 billion yuan ($58 billion) in total current assets, including about 113 billion yuan in cash and cash equivalents.

The company’s decision to join the auction may help it strengthen its foothold in fast-growing telecom market in South Asia. Pakistan has been only overseas market for China Mobile since it bought Paktel Ltd., for $284 million in 2007. The company was renamed China Mobile Pakistan, or CMPak, and its services were rebranded as “Zong” in 2008.

“If we succeed (in auction), we will provide Pakistani people with 3G services on a Wideband Code Division Multiple Access network, as the spectrums being auctioned are suitable for WCDMA technology,” he said. China Mobile’s business in Pakistan is performing well.

“More than four years ago, when we bought Paktel, it was on the brink of bankruptcy, but now the company can generate enough cash flow to maintain its operations,” Wang said. Zong brand has seen largest net growth in mobile users in Pakistan in the past three years, according to Pakistan Telecommunications Authority. Zong had a user base of 13.2 million by October, rising from less than 1.5 million in 2007.

Early this month, Fan Yunjun, CEO of CMPak Ltd, told website of China Radio International that China Mobile has invested $1.5 billion in Pakistan to date. Wang said one of advantages for China Mobile in overseas business is that its subsidiaries will be able to leverage parent company’s economies of scale to reduce costs and maintain competitiveness. For example, China Mobile’s procurement plan means that CMPak can buy cheaper equipment than its domestic rivals.

Experience gained from its operations in China and Pakistan will boost company’s confidence in stepping into other overseas markets, especially in emerging markets. Other expansion focus is to make investments related to Time Division Long-Term Evolution technology. The company is actively pushing for home-grown 4G TD-LTE technology to be adopted worldwide. “If we find opportunities that will help TD-LTE technology to go global, we will be interested,” Wang said.

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